Volkswagen restarts the engine of its massive car factory (but who's buying?)
That new Jetta smell... German car-making giant Volkswagen is reopening the world's largest car plant. As COVID-19 infection rates fall, the German government has allowed small retail stores to (re)open up shop. Now VW and its auto-making peers are reopening too — as long as they do business in an extra-distanced, extra-hygenic way.
- 3.5K cars/day: What VW's 63.K Wolfsburg workers can produce at the 70M square foot plant — the car-churning factory is the size of about 667 Walmarts.
- 0 cars/day: The number of cars the plant actually produced over the past 39 days. VW essentially lost 136K cars over the five-week period it was closed.
No more Wienerschnitzel Wednesdays... Germany's national pride car industry is gradually restarting its production engine. But not without taking some important precautions:
- Volkswagen will start with 1 shift of 8K workers instead of the usual 20K. Our favorite changes: Doors will be opened with elbows instead of hands and lunch will be BYO (no more schnitzels at the canteen).
- BMW will make workers wear masks and keep safe distances. Employees need to show up to the plant already wearing their factory clothes (to reduce germy locker room time). Hallways are now "one-way" traffic only.
What comes first, supply or demand? ... Even when economies reopen, consumers might still hesitate to go out and splurge. But signaling that factories are open could generate some demand. It's a chicken/egg problem — and TBD whether companies can stimulate demand by returning to business as usual...or whether they'll just end up over-producing.